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Employment Trend Indicates Flat Few Years For London Offices

Whether or not people actually choose to work from home or head in to town, the next few years could be very flat ones for the central London office sector.

Office-based employment in London is due to fall by about 35,000 this year, according to data from Oxford Economics, mainly as a result of the impact of the coronavirus.

It will pick up again in 2021, but the 30,000 jobs Oxford Economics predicts will be gained next year will not be enough to offset the 2020 drop. Falling or flat job growth implies less growth in demand for office space.

Workplace employment is due to grow by 0.8% a year between now and 2024. London’s gross value add is due to fall by 7% this year, and grow by about the same rate next year, if there is no return to a strict lockdown.

The City of London is likely to be the most resilient borough, seeing just a 2.3% fall in gross value add. Hillingdon, home of the virtually shut Heathrow airport, is expected to be the hardest hit, with an estimated 12.6% drop.

“What you have is office-based employment growth having a year off,” Oxford Economics Head of Global Cities Research Richard Holt said.

The prognosis of a flat period of growth is clearly shared by London’s office developers. Every single landlord surveyed in Deloitte’s most recent annual London crane survey said the leasing market is worse than six months ago, with 57% thinking it is a lot worse.

More than 700K SF of occupational requirements have been put on hold in London in the last two months, according to React News.

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